Monday, March 14, 2011

Paper erects pay wall – and traffic goes up!

They (including me) said it couldn’t be done, but the Augusta Chronicle put up a pay wall without losing traffic.

In fact, page views rose a nifty 5% in the three months since the Georgia newspaper installed a metered system similar to the one just implemented at the Dallas Morning News and soon to debut at the New York Times.

Traffic remains healthy at the Chronicle because its pay wall is about as impermeable as a badminton net. Still, the Augusta experience provides valuable insight into how a metered system could make it possible for NYTimes.Com to have its cake (ample page views for advertising) and eat it, too (charging for access to its content).

A metered pay system allows site visitors a certain number of free views before they are urged to subscribe. Visitors who don’t pay are blocked from some or all of the content on the site for the rest of the month. Then, they get a chance to come back the next month and start all over again.

While the system implemented in Augusta in December has established the principal of charging for content without, to date, affecting traffic on the site, it is unclear whether it is making any money – or ever will. But that’s fine by Executive Editor Alan English.

“The act of placing a value on our journalism may be more important than any penny we ever collect,” said English in a telephone interview and a series of follow-up emails. “It’s a powerful statement from the publisher and positions us distinctly in the market. If readers still get a certain amount [of content] for free, that's OK.”

According to Omniture data provided by English, traffic at his site counter-intuitively rose by 5% in the three months since the pay system was turned on. Combined page views from December, 2010, through February, 2011, were 23.6 million vs. 22.4 million in the comparable months in the prior years.

The surprising uptick in Augusta contrasts with the loss of nearly half the web traffic 2½ hours to the north at the Greenville (SC) News, which installed a hard pay wall in July that demands $2 a day or $9.95 a month from a visitor who clicks on any article on its site. The 516,821 monthly visits to Greenville Online in January, 2011, were nearly 47% lower than in the same month the previous year, according to Compete.Com.

(Note to G’ville management: You can copy and paste any URL on your site into any search engine, click the story atop the results and read the entire article for free. You might want to fix that.)

English credits the gain at his site to increased efforts in the newsroom to update the presentation of the website on an hourly basis and to post more material from more staffers more often, including photo galleries and short video snips.

“We had a digital growth strategy before we decided to implement the subscription system,” said English, who vigorously eschews the term “pay wall.” The decision to launch a pay strategy, he said, was a call to action throughout the newsroom, adding: “We told ourselves that we had better make good on doing what we told ourselves we needed to do.”

For all the improvements English and his colleagues may have made in their digital operation, the principal reason his traffic was unaffected by the pay system seems to be the generous amount of content a user can access for free before even learning that she is supposed to pay for it. Here’s what I mean:

While the Chronicle says it will allow free access to 25 premium articles a month before a visitor has to pay, dozens of other non-premium articles can be viewed without limitation. I clicked through 21 page views before encountering a screen that told me I had used up five of my 25 allotted premium articles. It is impossible to tell which articles are premium and which are free, but English considers the confusion a plus, not a problem.

The Dallas Morning News, by contrast, readily identifies premium articles on its website but gives few free samples before forcing visitors to pay for access that costs $2.31 a week or $9.24 a month. This hardball approach, which is clearly aimed at building a robust flow of subscription revenues, is likely to put a considerable dent in the paper’s web traffic.

Given the liberal amount of free content available at the Augusta Chronicle, it is hard to imagine how many subscriptions the paper is likely to acquire. Although English won’t disclose how many he has sold, he said “we saw a couple hundred subscribers in the first few days” and “we pick up two to eight new people per day.”

Subscriptions are $6.95 a month for digital-only access and $2.95 a month if you take the print edition. Purchases are evenly split between the two plans, said English, adding that he has seen almost no churn.

Based on the experience to date and assuming a constant number of new subscribers on every day of the year for 12 months, the annual revenue from the pay system could range from about $43,000 (if two people subscribe each day) to $173,000 (if eight people subscribe each day).

So long as the newspaper has enough page views to produce enough advertising inventory to satisfy demand, the subscription revenue would appear to be sufficient to support one to four additional bodies in the newsroom (although there can be no guarantee that this is where the windfall would land).

It’s too soon to say whether the Chronicle can sustain the pace of even a couple of fresh pay subscribers per day. And page views are likely to drop when the Chronicle dials down the number of free views it permits, which English said is likely to occur in the near future.

“I would not draw too many conclusions from the early numbers,” he cautioned. “It’s very early in our game and we are still building our strategy. But we are glad to be part of the wave of people who are putting forth the value proposition for content created by professional journalists. Giving it away for all those years was a mistake.”

22 Comments:

Anonymous said...

Alan,Excellent post, and nice to see someone out there doing *reporting* rather than pontificating about paywalls. My one thought is that this line, "assuming a constant number of new subscribers on every day of the year for 12 months" is probably presuming too much. Subscription plans usually get the biggest uptake in the first few months, as the most loyal and faithful readers pony up. That's certainly what happened with NYT's TimesSelect a few years ago.In other words, past results don't often presage future performance. But it'd be nice if that happened.Bill Grueskin

So, am I biased? Sure. But I also know many Augustans considered the alt-weekly to be the "real" paper, on account of Morris running the city like a fiefdom. Anyway: I'm just saying, there may be an alternate explanation for the Chronicle's "counterintuitive" traffic growth.

An excellent post and one that certainly provides hope for the pay wall proponents. However, does the Augusta paper have viable competition in the market? I hope to be proven wrong, but I still believe pay walls work on the local level only when customers have few or no options for their news.

It would be nice to see some numbers regarding how many people are actually paying for content. While any increase in traffic is a good thing, to date I haven't seen amy meaningful numbers about people paying for content.

If anything, a soft wall with free access might end up driving print numbers even lower.

Funny, when I quoted early experiences with pay walls (or "paid access" to get rid of the negativity that is associated with the term "pay wall") by The Economist and The Hearst Group back in 2009, Alan (and many others) disregarded them as impossible.

Well, it makes me feel good to be in the right. On the other hand, if I think about the money, jobs and opportunities lost, just because some so-called "experts" could not believe the facts about the content monetization options, it makes me sad.

Such a waste, and ti is only because the Newsosaurs of the world could not open their minds a little and imagine a better future.

To say that "traffic has gone up" is not an entirely accurate statement. True, PVs have gone up marginally year-over-year, but what WOULD they have gone up without a pay system in place? Other news sites are up 40, 50, or 60% YOY. I would argue that a 5% increase is in fact a decrease when compared against the property's peer group.

I don't think the story is complete. Stories on pay walls are written as if the subjects were online entities only, but they're not. What happens over a period of time to paid print circulation when online pay strategies are implemented? Don't some lost print subscribers return once their favorite home town news is no longer free? We're in a multi-faceted business so all angles need to be covered.

"we are glad to be part of the wave of people who are putting forth the value proposition for content created by professional journalists. Giving it away for all those years was a mistake." --- 'Been giving away content since the advent of the penny press 180 years ago, guys. The ads paid for the content & the subscription price paid for the legacy distribution channels.

Steve,Using public Web analysis tools on anyone's growth might leave you with apples and oranges on peer comparisons. Alan asked if the 40% growth he found was accurate. We countered with a more conservative analysis using internal measures that may include areas not measured by those tools. We have real increases YOY in the each of the last four months. Also other anomalies exist: We started blocking some internal traffic previously counted February 2010. There was an auto-refresh on the homepage removed about a year ago. Sincerely,Alan English

Porus Yazdi Mistry is a Banker with more than 20+ years of experience he is currently working with one of thebest software professional companies in India , Nucleus Softwares, Noida. Porus has great expertise in termsof liquidity management, wealth management, investment banking. Attain more information visit this websitehttp://www.porusyazdimistry.com

This blog Is very informative , I am really pleased to post comment on this blog.Option tips is dedicated towards unfurling the expertise of those Option veterans in the Indian Stock Market domain who are involved in providing option tips.Share tips

About Me

Alan D. Mutter is perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time.
Mutter began his career as a newspaper columnist and editor at the Chicago Daily News and later rose to City Editor of the Chicago Sun-Times. In 1984, he became No. 2 editor of the San Francisco Chronicle.
He left the newspaper business in 1988 to join InterMedia Partners, a start-up that became one of the largest cable-TV companies in the U.S.
Mutter was the COO of InterMedia when he moved to Silicon Valley in 1996 to join the first of the three start-up companies he led as CEO.
The companies he headed were a pioneering Internet service provider and two enterprise-software companies.
Mutter now is a consultant specializing in corporate initiatives and new media ventures involving journalism and technology. He ordinarily does not write about clients or subjects that will affect their interests. In the rare event he does, this will be fully disclosed.
Mutter also is on the adjunct faculty of the Graduate School of Journalism at the University of California at Berkeley.